help needed on Defined Benefit Obligation - different rule vs. 2012???

CFA Level II FRA
#1

Any one can kindly help me on understanding this? –

while i was doing 2012 mock, the answer sheet noted “IFRS does not recognize the deferred portion of past service costs in the balance sheet liability…”, i didnt see this rule listed anywhere in the 2013 textbook, does this mean this pension rule differs b/t 2012 and 2013?

pls kindly help answer this, many thanks!!!

Ray

#2

i saw the same thing. according to Schweser, IFRS does not recognize any past service cost on the balance sheet and all of it is expensed in the income statement. the CFAI mock referred to it as unrecognized past service costs, so I am not sure

#3

There is a difference between 2012 and 2013. In 2012, the IFRS BS did not reflect funded status but in 2013 it does. With regards to past service cost, Schweser is right that it goes through income statement - but the statement that it does not affect BS is incorrect - it would be included in the PBO (actually PVDBO under IFRS) when computing FS.

#4

this is very helpful and reassuring, thx a lot!